Silver prices spent the end of March in a correction, pulling back from the 4-month high of $25.8. In the last few days, we have seen a new wave of bulls trying to return to recent highs. Buyers have already managed to push the price of the white metal above the $25 an ounce mark, which could attract further attention from traders. Given the high volatility of silver prices, the $25.8 area is seen as achievable in the coming days.
Silver prices in 2024 are showing good dynamics, but still lagging behind gold in terms of growth rates. However, this also means that the white metal has more upside potential. The number of market participants who have realized that silver is unfairly lagging behind gold is gradually growing. This can be seen in the latest statistics from the US Commodity Futures Trading Commission (CFTC).
According to the CFTC, money managers increased their speculative long positions in silver by 7,963 contracts to 53,484. Meanwhile, short positions fell by 3,365 contracts to 16,362. The net bullish position in silver has risen for 3 consecutive weeks and now stands at 37,122 contracts. This is the highest level since April 2022.
Despite the significant increase in bullish speculative positioning in silver, it is still well below the levels seen in 2020 before the price rallied to $30 an ounce. That's why a number of analysts, including Wells Fargo's John LaForge and MKS PAMP's Nicky Shiels, point to significant further upside potential for the white metal. The price of silver will be supported by robust investment and industrial demand, as well as limited supply.
On the daily silver chart, the Stochastic Indicator lines have crossed at the exit of the oversold zone, confirming the signal for a new wave of growth. The target for buyers will be the 25.8 level, but to increase the reliability of the trade, it is possible to take profits a little earlier - at the 25.6 mark.
Consider the following trading strategy:
Buy silver at the current price. Take profit - 25.6. Stop loss - 24.8.
Traders may also use a Trailing stop instead of a fixed Stop loss at their discretion
This content is for informational purposes only and is not intended to be investing advice.
